Rumasa chief tried to entice bank with promise of brandy

The patriarch of Grupo Nueva Rumasa, José María Ruiz-Mateos, tried to offer Banco Santander CEO Emilio Botín cases of brandy as collateral for loans for his fledgling businesses, letters obtained by EL PAÍS reveal.

In a June 2009 letter to Javier Peralta, director of risk assessment at Banco Santander, Ruiz-Mateos asks him to consider substituting his companies' real estate collateral for "prime materials" similar, according to the Nueva Rumasa chief, to what other big banks are doing "because it offers much more security" at this time of financial crisis. "Fortunately, we have an abundance of a one-off product, which are very old vintages of Jerez brandies - the more it ages, the more it's worth - which would serve as a guarantee or partial or total payment for our loans with your bank."

He also offered to meet with Banco Santander officials to "show them" the brandies. The offer was not taken up by Santander.

Last month, Grupo Nuevo Rumasa sought legal protection from its creditors in an attempt to prevent the conglomerate from going into receivership and thus putting in jeopardy some 5,000 investors, who agreed to pump money into the beleaguered companies through questionable promissory-note offerings.

Prosecutors are looking into Ruiz-Mateo's business dealings, focusing on suspicions that he may have avoided paying taxes by registering some of his companies that operate in Spain in overseas tax havens.

After Ruiz-Mateo's offer to Santander fell through, the entrepreneur went on to use the liquor as a guarantee forthe issuance of new investor notes a few months later.

He described the offering in an advert as "a solid investment opportunity guaranteed by a priceless treasure of the outstanding stock of very old Brandy de Jerez."

The brandy had, he continued, "been certified in aging in accordance with current regulations of the Regulatory Board in the name of Brandy de Jerez and with a value of more than 1.2 billion euros appraised by the famous and prestigious IESE professor Don Pablo Fernández López."

In October 2009, the CNMV securities commission warned of such guarantees.

"In connection with the issuance of guarantees that was addressed in the advertisement, it should be noted that at the present there is no filing registered in the Personal Property Registry for any guarantees, in particular any non-possessive pledge [by Nueva Rumasa] with this office, on the liquor stock."

Professor Pablo Fernández, cited in the advertisement, also distanced himself sharply from the appraisal, saying that he had not been notified that he would be quoted in the text. He did not, he went on, evaluate the brandy to calculate the value of stocks for the promissory notes, which were issued by Maspalomas Hoteles SA.

"How would you calculate the value of stocks with brandy offered as collateral for notes issued by Maspalomas Hotels SA?" Professor Pablo said. "In this case you would have to estimate the price at which you could sell the stock today to another company. Of course, this does not affect the decision to invest or not in these notes ? this depends on each investor's expectations about Maspalomas Hoteles SA."